Galapagos announces strategy to accelerate innovation and reports
strong third quarter 2022 results
- Clear path forward for accelerated
growth and value creation
- Reshape innovation model and
build fit-for-purpose
organization in key
strategic therapeutic areas:
immunology and oncology
- Jyseleca®
2022 net sales guidance
further increased
to
€80-€90
million from
€75-€85
million at H1 2022
- First nine
months 2022
financial results:
- Strong performance of
Jyseleca franchise with
€60.5 million
in net sales
- Group revenues of
€410.2
million
- Operating loss
of €135.1
million
- Cash and current financial
investments of €4.4
billion on
30
September
R&D and Strategy
Webcast presentation
at R&D
Update tomorrow in New
York, 4
November
2022,
13.00 –
15.30 CET /
8 am – 10.30
am
EDT,
www.glpg.com
Mechelen, Belgium;
3 November
2022,
21.01
CET; regulated information – Galapagos NV
(Euronext & NASDAQ: GLPG) today
announced its strategy
for accelerated growth and
value creation, its financial
results for the first nine months of
2022, and the
outlook for the remainder of 2022.
The results are further detailed
in the Q3
2022 financial
report available
on the financial reports
section of the
website.
Forward,
Faster strategy
to accelerate innovation
“Guided by our purpose to bring transformational
medicines to patients around the world to help them live longer and
healthier lives, we today announce our Forward, Faster
strategy to accelerate growth and value creation by reshaping the
way we innovate and operate. This strategy provides a clear path
forward based on three key pillars. First, we will shift from novel
target-based discovery to patient-centric medical need research and
development with a focus on our key therapeutic areas of immunology
and oncology. Second, we will build on our current capabilities and
derisk R&D through multiple drug modalities, including CAR-T,
and by focusing on best-in-disease validated targets in our
strategic therapeutic areas with shorter time-to-patient potential.
Third, we will increase our business development efforts to
complement our pipeline and continue to work with our collaboration
partner Gilead to bring more medicines to patients worldwide,” said
Dr. Paul Stoffels1, CEO and Chairman of the Board of Directors of
Galapagos.
“Our new fit-for-purpose organizational
structure and operating model will focus on accelerating our
pipeline in immunology and oncology, supported by externally
sourced opportunities, and we will discontinue our activities
in fibrosis and kidney disease2.
As a result of our new strategic direction, we
intend to reduce our workforce by approximately 200 positions
across our sites in Europe to create room to reinvest in new
capabilities and programs in our oncology franchise. This is a
difficult but necessary decision, and we will follow all applicable
processes with respect for our people.”
Third quarter financial
performance “Jyseleca continues to perform very well with
a growing European base and a solid €60.5 million in net sales as
of 30 September. As a result, we further increase our 2022 net
sales guidance to €80-€90 million from our initial guidance of
€65-€75 million. We ended the third quarter of the year with a
strong balance sheet of €4.4 billion in cash and current financial
investments, which provides us with the necessary means to invest
in immunology and oncology and execute on smart business
development. We reiterate our cash burni guidance of €480-€520
million for the full year 2022,” added Bart Filius, President, COO
and CFO of Galapagos.
Q3 2022 operational review and recent
events Jyseleca
commercial & regulatory progress
- Strong adoption across Europe with reimbursement for rheumatoid
arthritis (RA) in 15 countries and for ulcerative colitis (UC) in
10 countries
- Marketing Authorization Application (MAA) submitted for the
treatment of UC to Swissmedic, the regulatory authority in
Switzerland
- Article 20 pharmacovigilance procedure ongoing by the European
Medicines Agency (EMA)
Pipeline update
- Preparations advanced to start Phase 2 of GLPG3667 (TYK2
inhibitor) in dermatomyositis, with the aim to recruit the first
patients around year-end
Corporate update
- Received various transparency notifications from FMR LLC,
indicating that its shareholding in Galapagos changed, without
crossing below the 5% threshold, to 5.65% of the current
outstanding Galapagos shares
- Raised €6.7 million year-to-date through the exercise of
subscription rights
Post-period events
- On 27 October 2022, the
Pharmacovigilance Risk Assessment Committee (PRAC) of the European
Medicines Agency (EMA) concluded the safety review (Article 20
procedure) of all JAK inhibitors approved in the EU for the
treatment of inflammatory diseases. On 28 October 2022, the PRAC
recommended the harmonization of all labels and concluded that JAK
inhibitors should remain indicated for the treatment of patients
with RA who have responded inadequately to or who cannot tolerate
disease modifying anti-rheumatic drugs (DMARDs) therapy, and for
patients with UC who have responded inadequately to or who cannot
tolerate conventional therapy or biologics. The PRAC also
recommended to update all product labels to include a precautionary
approach for use of JAK inhibitors in patients with identified risk
factors only if no suitable treatment alternative is available
(Section 4.4 - Warning and Precautions). The PRAC recommendations
will now be considered by the Committee for Medicinal Products for
Human Use (CHMP) for an opinion
- Abstract accepted for poster
presentation at the Annual Society of Hematology (ASH) conference
taking place 10-13 December 2022 on the initial data from the
ATALANTA-1 Phase 1/2 study in recurring/refractory Non-Hodgkin
Lymphoma (rrNHL) evaluating the feasibility, safety and efficacy of
the CD19 CAR-T candidate manufactured at
point-of-care
- New post hoc analyses from
SELECTION Phase 3 data set with filgotinib in UC patients presented
at the United European Gastroenterology (UEG) Week
- Received positive CHMP opinion for
Jyseleca European label update based on testicular function safety
data from MANTA/RAy studies
Financial
highlights for the first nine months of
2022 (unaudited)(€ millions,
except basic & diluted
loss per share)
|
30 September
2022 group total |
30 September
2021 group total |
Variance |
Product net sales |
60.5 |
6.1 |
54.3 |
Collaboration revenues |
349.7 |
311.7 |
38.0 |
Total net revenues |
410.2 |
317.9 |
92.3 |
Cost of sales |
(7.9) |
(0.7) |
(7.3) |
R&D expenditure |
(364.1) |
(378.0) |
14.0 |
G&Aii and S&Miii expenses |
(202.7) |
(151.3) |
(51.4) |
Other operating income |
29.5 |
36.3 |
(6.9) |
Operating loss |
(135.1) |
(175.7) |
40.7 |
|
|
|
|
Net financial result |
127.5 |
33.6 |
93.8 |
Income taxes |
(3.2) |
0.3 |
(3.5) |
Net loss from continuing operations |
(10.8) |
(141.8) |
131.0 |
Net profit from discontinued operations |
- |
22.2 |
(22.2) |
Net loss of the period |
(10.8) |
(119.6) |
108.8 |
Basic and diluted loss per share (€) |
(0.16) |
(1.83) |
|
Basic and diluted loss per share from continuing operations
(€) |
(0.16) |
(2.16) |
|
|
|
|
|
Current financial investments and cash and cash
equivalents |
4,362.1 |
4,874.2 |
|
Q3 2022
financial resultsWe reported
product net sales of Jyseleca in Europe for the first nine months
of 2022 amounting to €60.5 million (€6.1 million in the first nine
months of 2021). Our counterparties for the sales of Jyseleca were
mainly hospitals and wholesalers located across Europe.
Cost of sales related to Jyseleca net sales in
the first nine months of 2022 amounted to €7.9 million.
Collaboration revenues amounted to €349.7
million for the first nine months of 2022, compared to €311.7
million for the first nine months of 2021.
Revenues recognized related to the collaboration
agreement with Gilead for the filgotinib development were €166.8
million in the first nine months of 2022 compared to €136.4 million
for the same period last year. This increase was due to a higher
increase in the percentage of completion, as well as a higher
revenue recognition of milestone payments, strongly influenced by
the milestone achieved related to the regulatory approval in Japan
for UC in the first nine months of 2022. The revenue recognition
related to the exclusive access rights for Gilead to our drug
discovery platform amounted to €172.6 million for the first nine
months of 2022 (€173.3 million for the same period last year).
We have recognized royalty income from Gilead
for Jyseleca for €8.2 million in the first nine months of 2022
(compared to €1.9 million in the same period last year) of which
€3.6 million royalties on milestone income for UC approval in
Japan.
Additionally, we recorded milestones of €2.0
million triggered by the first sales of Jyseleca in the Czech
Republic and Portugal by our distribution and commercialization
partner Sobi, in the first nine months of 2022.
Our deferred income balance on 30 September 2022
includes €1.6 billion allocated to our drug discovery platform that
is recognized linearly over the remaining period of our 10-year
collaboration, and €0.5 billion allocated to the filgotinib
development that is recognized over time until the end of the
development period.
Our R&D expenditure in the first nine months
of 2022 amounted to €364.1 million, compared to €378.0 million for
the first nine months of 2021. This decrease was primarily
explained by a decrease in subcontracting costs from €189.1 million
in the first nine months of 2021 to €158.5 million in the first
nine months of 2022, primarily due to the winding down of the
ziritaxestat (IPF) program and reduced spend on our SIKi and TYK2
programs. This was partly offset by cost increases for our
filgotinib program, on a nine month basis compared to the same
period in 2021. Personnel costs decreased from €134.3 million in
the first nine months of 2021 to €130.0 million for the same period
this year. Depreciation and impairment amounted to €35.6 million
for the first nine months of 2022 (€14.1 million for the same
period last year). This increase was primarily due to an impairment
of €26.7 million of previously capitalized upfront fees related to
our collaboration with Molecure on the dual chitinase inhibitor
OATD-01 (GLPG4716) recorded in Q2 2022.
Our G&A and S&M expenses amounted to
€202.7 million in the first nine months of 2022, compared to €151.3
million in the first nine months of 2021. This increase was
primarily due to the termination of our 50/50 filgotinib
co-commercialization cost sharing agreement with Gilead for
filgotinib in 2022. The cost increase was also explained by an
increase in personnel costs for the first nine months of 2022
compared to the same period last year explained by an increase in
the commercial work force driven by the commercial launch of
filgotinib in Europe.
Other operating income (€29.5 million vs
€36.3 million for the same period last year) decreased, mainly
driven by lower grant and R&D incentives income.
Net financial income in the first nine months of
2022 amounted to €127.5 million, compared to net financial
income of €33.6 million for the first nine months of 2021. Net
financial income in the first nine months of 2022 was primarily
attributable to €102.1 million of unrealized currency exchange
gains on our cash and cash equivalents and current financial
investments at amortized cost in U.S. dollars, and to €26.0 million
of positive changes in (fair) value of current financial
investments. The financial expenses also contained the effect of
discounting our long term deferred income of €5.7 million.
We realized a net loss from continuing
operations of €10.8 million for the first nine months of 2022,
compared to a net loss of €141.8 million for the first nine months
of 2021.
The net profit from discontinued operations for
the nine months ended 30 September 2021 consisted of the gain on
the sale of Fidelta, our fee-for-services business, for €22.2
million.
We reported a group net loss for the first nine
months of 2022 of €10.8 million, compared to a group net loss of
€119.6 million for the first nine months of 2021.
Cash
positionCurrent financial investments and cash and
cash equivalents totaled €4,362.1 million on 30 September 2022, as
compared to €4,703.2 million on 31 December 2021.
Total net decrease in cash and cash equivalents
and current financial investments amounted to €341.1 million during
the first nine months of 2022, compared to a net decrease of €295.2
million during the first nine months of 2021. This net decrease was
composed of (i) €343.1 million of operational cash burn, (ii)
offset by €6.7 million of cash proceeds from capital and share
premium increase from exercise of subscription rights in the first
nine months of 2022, (iii) €26.0 million positive changes in (fair)
value of current financial investments and €105.6 million of mainly
positive exchange rate differences, and (iv) the cash out from the
acquisitions of CellPoint and AboundBio, net of cash acquired, of
€136.4 million.
Acquisitions
of
CellPoint
and AboundBioThe preliminary
accounting of the acquisitions of CellPoint and AboundBio are
included in our Q3 2022 condensed consolidated financial
statements. To date, we have performed a preliminary fair value
analysis of the business combinations. We expect the provisional
amount of goodwill to change significantly upon the completion of
the purchase price allocation, resulting from the valuation of the
different assets and liabilities acquired.
Near term outlook
Immunology – an
area in which we have
built deep scientific know-how and expertise since our
founding
We expect reimbursement decisions in most key
European markets for Jyseleca in UC this year and anticipate that
Sobi will further progress with reimbursement discussions in RA and
UC in Eastern and Central Europe, Greece, and the Baltic countries.
We also expect to report initial results from the FILOSOPHY
Real-World Evidence Phase 4 trial in RA later this year, and
topline results from the DIVERSITY Phase 3 study in Crohn’s disease
(CD) in the first quarter of 2023. Before the end of this year, we
anticipate a CHMP opinion following the PRAC Article 20
recommendation issued on 28 October 2022.
We aim to recruit the first patients in a Phase
2 study of our TYK2 inhibitor product candidate, GLPG3667, in
dermatomyositis around year-end, and we intend to start a Phase 2
study in patients with Systemic Lupus Erythematosus (SLE) in 2023.
Finally, we continue to advance select compounds with optimized
pharmacology and selectivity from our SIKi portfolio.
Oncology portfolio – an
area where we will continue to
grow and invest
We will present the initial data from the
ATALANTA-1 Phase 1/2 study of the CD19 CAR-T product candidate in
patients with rrNHL at the annual ASH conference in December. The
objectives of the ATALANTA-1 study are to evaluate the feasibility,
safety and efficacy of the CD19 CAR-T candidate manufactured at
point-of-care and will provide initial clinical validation of the
CAR-T decentralized supply model.
The recruitment of the ongoing Phase 1/2 studies
of the CD19 CAR-T candidate in patients with rrNHL (ATALANTA study)
and relapsed/refractory Chronic Lymphocytic Leukemia (rrCLL)
(EUPLAGIA study) is progressing well, and we are on track to report
topline results of the dose escalation cohorts in the first half of
2023, which will be followed by one or more dose expansion
cohorts.
Financial guidance and Forward,
Faster strategy
presentation
For the full year 2022, we reiterate our net
cash burn of €480-€520 million, including the acceleration in
oncology, and we further increase our net sales guidance for
Jyseleca to €80-€90 million.
A detailed update of the strategy, portfolio and
pipeline goals and commercial progress will be presented by
Galapagos management and key opinion leaders at the company’s
R&D Day 2022 which will be held tomorrow, Friday, 4 November
2022, from 8:00 am to 10:30 am EDT (13:00 to 15:30 CET) in New
York.
The event will include a live webcast on the
Investors section of the company’s website and a replay will be
available on the Galapagos website within 48 hours after the event.
Presentations showcased during the event will be featured on the
Presentations section of the company’s website.
To participate in the conference call, please
register in advance using this link. Upon registration, the
dial-in numbers will be provided. The conference call can be
accessed 10 minutes prior to the start time by using the conference
access information provided in the e-mail received at the point of
registering, or by selecting the call me feature.
Third quarter 2022 financial
report
Galapagos’ financial report for the first nine
months ended 30 September 2022, including details of the unaudited
consolidated results, is accessible on the financial reports
section of our website.
Financial
calendar
2023
23 February
2023 |
Full year
2022 results |
(webcast 24
February 2023) |
23 March 2023 |
Annual report
2022 |
|
25 April 2023 |
Annual
Shareholders’ meeting |
|
4 May 2023 |
First quarter
2023 results |
(webcast 5 May
2023) |
3 August 2023 |
Half year 2023
results |
(webcast 4 August
2023) |
2 November
2023 |
Third quarter
2023 results |
(webcast 3
November 2023) |
About Galapagos
Galapagos is a fully integrated biotechnology
company focused on discovering, developing, and commercializing
innovative medicines. We are committed to improving patients’ lives
worldwide by targeting diseases with high unmet needs. Our R&D
capabilities cover multiple drug modalities, including small
molecules and cell therapies. Our portfolio comprises discovery
through to Phase 4 programs in immunology, oncology, and other
indications. Our first medicine for rheumatoid arthritis and
ulcerative colitis is available in the European Union, Norway,
Great Britain, and Japan. For additional information, please visit
www.glpg.com or follow us
on LinkedIn or Twitter.
Jyseleca® is a trademark of Galapagos NV
and Gilead Sciences, Inc. or its related companies.
Except for filgotinib’s approval as Jyseleca for the treatment of
moderately to severely RA and UC by the relevant regulatory
authorities in the European Union, Great Britain, and Japan, our
drug candidates are investigational; their efficacy and safety have
not been fully evaluated by any regulatory authority.
Contact
Investors:Sofie Van GijselHead of Investor
Relations+1 781 296 1143
Sandra CauwenberghsDirector Investor Relations+32 495 58 46
63ir@glpg.com
Media:Marieke VermeerschHead of Corporate
Communication
+32 479 490 603media@glpg.com
Forward-looking statements
This press release contains forward-looking
statements, all of which involve certain risks and uncertainties.
These statements are often, but are not always, made through the
use of words or phrases such as “believe,” “anticipate,” “expect,”
“intend,” “plan,” “seek,” “upcoming,” “future,” “estimate,” “may,”
“will,” “could,” “would,” “potential,” “forward,” “goal,” “next,”
“stand to,” “continue,” “should,” “encouraging,” “aim,” “explore,”
“further” as well as similar expressions. These statements include,
but are not limited to, statements made in the sections captioned
“Q3 2022 operational review and recent events” and “Near term
outlook”, the guidance from management (including the guidance
regarding the expected operational use of cash during the 2022
fiscal year, the expected financial results and our strategic and
capital allocation priorities), statements regarding the
acquisitions of CellPoint and AboundBio, including statements
regarding anticipated benefits of the acquisitions and the
integration of CellPoint and AboundBio into our portfolio and
strategic plans, statements regarding our regulatory and R&D
outlook, statements regarding expected financial results,
statements regarding the amount and timing of potential future
milestones, opt-in and/or royalty payments, our R&D strategy,
including progress on our immunology or oncology portfolio or our
SIKi platform, and potential changes in such strategy, statements
regarding our pipeline and complementary technology platforms
driving future growth, statements regarding the strategic
re-evaluation, statements regarding our expectations on commercial
sales of filgotinib, statements regarding the global R&D
collaboration with Gilead and the amendment of our arrangement with
Gilead for the commercialization and development of filgotinib,
statements regarding the expected timing, design and readouts of
ongoing and planned clinical trials, including recruitment for
trials and topline results for trials and studies in our portfolio,
statements regarding the expected topline results from the
DIVERSITY Phase 3 study in CD, statements related to the EMA’s
safety review of JAK inhibitors used to treat certain inflammatory
disorders, including filgotinib, initiated at the request of the
European Commission (EC) under article 20 of Regulation (EC) No
726/2004, statements relating to interactions with regulatory
authorities, the timing or likelihood of additional regulatory
authorities’ approval of marketing authorization for filgotinib for
RA, UC or other indications for filgotinib in Europe, Great
Britain, Japan, and the U.S., such additional regulatory
authorities requiring additional studies, the timing or likelihood
of pricing and reimbursement interactions for filgotinib,
statements relating to the build-up of our commercial organization,
commercial sales for filgotinib and rollout in Europe, statements
related to the expected reimbursement for Jyseleca, and statements
regarding our strategy (including our strategic transformation
exercise), portfolio goals, business plans, focus, and plans for a
sustainable future. We caution the reader that forward-looking
statements are based on our management’s current expectations and
beliefs and are not guarantees of future performance.
Forward-looking statements may involve known and unknown risks,
uncertainties and other factors which might cause our actual
results, financial condition and liquidity, performance or
achievements, or the industry in which we operate, to be materially
different from any historic or future results, financial
conditions, performance or achievements expressed or implied by
such forward-looking statements. Such risks include, but are not
limited to, the risk that our expectations regarding our 2022
revenues and financial results or our 2022 operating expenses may
be incorrect (including because one or more of our assumptions
underlying our revenue or expense expectations may not be
realized), the risk that ongoing and future clinical trials may not
be completed in the currently envisaged timelines or at all, the
inherent risks and uncertainties associated with competitive
development, clinical trial, recruitment of patients for trials and
product development activities and regulatory approval requirements
(including, but not limited to, the risk that data from our ongoing
and planned clinical research programs in RA, rrNHL, rrCLL, CD, UC,
other immunologic indications or other indications or diseases, may
not support registration or further development of our product
candidates due to safety, or efficacy concerns, or other reasons),
risks related to the acquisitions of CellPoint and AboundBio,
including the risk that we may not achieve the anticipated benefits
of the acquisitions of CellPoint and AboundBio, the inherent risks
and uncertainties associated with target discovery and validation
and drug discovery and development activities, risks related to our
reliance on collaborations with third parties (including our
collaboration partner for filgotinib, Gilead), risks related to the
implementation of the transition of the European commercialization
responsibility of filgotinib from Gilead to us, the risk that the
transition will not be completed on the currently contemplated
timeline or at all, including the transition of the supply chain,
and the risk that the transition will not have the currently
expected results for our business and results of operations,
estimating the commercial potential of our product candidates and
our expectations regarding the costs and revenues associated with
the transfer of the European commercialization rights to filgotinib
may be incorrect, the risk that we will not be able to continue to
execute on our currently contemplated business plan and/or will
revise our business plan, including the risk that our plans with
respect to CAR-T may not be achieved on the currently anticipated
timeline or at all, the risk that our projections and expectations
regarding the commercial potential of our product candidates or
expectations regarding the costs and revenues associated with the
commercialization rights may be inaccurate, the risks related to
our strategic transformation exercise, including the risk that we
may not achieve the anticipated benefits of such exercise on the
currently envisaged timeline or at all, the risk that we will
encounter challenges retaining or attracting talent, risks related
to disruption in our operations, supply chain or ongoing studies
(including our DIVERSITY 1 study) due to the conflict between
Russia and Ukraine, the risks related to continued regulatory
review of filgotinib following approval by relevant regulatory
authorities and the EMA’s safety review of JAK inhibitors used to
treat certain inflammatory disorders, including the risk that the
EMA and/or other regulatory authorities determine that additional
non-clinical or clinical studies are required with respect to
filgotinib, the risk that the EMA may require that the market
authorization for filgotinib in the EU be amended, the risk that
the EMA may impose JAK class-based warnings, the risk that the
EMA’s safety review may negatively impact acceptance of filgotinib
by patients, the medical community, and healthcare payors and the
risks and uncertainties related to the impact of the COVID-19
pandemic. A further list and description of these risks,
uncertainties and other risks can be found in our filings and
reports with the Securities and Exchange Commission (SEC),
including in our most recent annual report on Form 20‐F filed with
the SEC and our subsequent filings and reports filed with the SEC.
Given these risks and uncertainties, the reader is advised not to
place any undue reliance on such forward-looking statements. In
addition, even if the result of our operations, financial condition
and liquidity, or the industry in which we operate, are consistent
with such forward-looking statements, they may not be predictive of
results, performance or achievements in future periods. These
forward-looking statements speak only as of the date of publication
of this release. We expressly disclaim any obligation to update any
such forward-looking statements in this release to reflect any
change in our expectations with regard thereto or any change in
events, conditions or circumstances on which any such statement is
based or that may affect the likelihood that actual results will
differ from those set forth in the forward-looking statements,
unless specifically required by law or regulation.
1 Acting via Stoffels IMC BV2 The study with
‘2737 in polycystic kidney disease is ongoing with topline results
expected in the first half of 2023. If successful, we aim to
outlicense the program.
i The operational cash burn (or operational cash flow if this
liquidity measure is positive) is equal to the increase or decrease
in our cash and cash equivalents (excluding the effect of exchange
rate differences on cash and cash equivalents), minus:• the net
proceeds, if any, from share capital and share premium increases
included in the net cash flows generated from/used in (-) financing
activities• the net proceeds or cash used, if any, related to the
acquisitions or disposals of businesses; the movement in restricted
cash and movement in current financial investments, if any, the
cash advances and loans given to third parties, if any, included in
the net cash flows generated from/used in (-) investing activities
• the cash used for other liabilities related to the acquisition of
businesses, if any, included in the net cash flows generated
from/used in (-) operating activities. This alternative liquidity
measure is in our view an important metric for a biotech company in
the development stage. The operational cash burn for the nine
months ended 30 September 2022 amounted to €343.1 million and can
be reconciled to our cash flow statement by considering the
decrease in cash and cash equivalents of €1,583.9 million, adjusted
by (i) the cash proceeds from capital and share premium increase
from the exercise of subscription rights by employees for €6.7
million, (ii) the net purchase of current financial investments
amounting to €1,111.1 million, and (iii) the cash out from
acquisition of subsidiaries, net of cash acquired, of €136.4
million ii General and administrativeiii Sales and marketing
- Galapagos announces strategy to accelerate innovation and
reports strong third quarter 2022 results
Galapagos (TG:GXE)
Historical Stock Chart
From Sep 2024 to Oct 2024
Galapagos (TG:GXE)
Historical Stock Chart
From Oct 2023 to Oct 2024